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Wednesday, 5 December 1973
Page: 2440

Senator TOWNLEY (TASMANIA) - I ask a question of the Minister representing the Minister for Housing and Construction. I preface it by saying that the Minister is no doubt aware of the way in which the recently imposed increase in interest rates on all bank loans is creating a strain on many people who entered into an agreement with their banks or building societies to buy a home prior to their imposition and that the new rates make it quite impossible for many young couples who are trying to obtain their first home to get a loan.

The PRESIDENT - Order! The honourable senator should ask the question.

Senator TOWNLEY - I ask: Has the Government investigated whether it would be possible to make known to people borrowing money for houses just what the maximum interest rate is that they will be forced to pay so that they will know where they stand when they sign an agreement? Secondly, can the Minister give any indication as to how long the present squeeze will go on so that young people can make plans for their future?

Senator CAVANAGH - I do not think it would be possible at any time under our monetary system to give a guarantee to anyone entering into an agreement as to what the interest rate may be during the period of the agreement. It could be adverse to borrowers on occasions if the interest rate throughout the period of a loan were to be stipulated. The Government is at present giving active consideration to the provision of some assistance to those who are experiencing difficulty in financing the purchase of a home, especially the low income earners. The Government hopes to make some announcement on this matter in the very near future. It must be remembered that applications for home loans are today in excess of the capability of the industry to supply those homes.

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